Maintaining a strong credit score is essential for achieving your financial goals, but there are common misconceptions that could be holding you back. As part of the 2024 State of Consumer Credit study, a survey conducted by The Harris Poll for NerdWallet revealed that many Americans are misinformed about how credit works. Here, we debunk five credit myths that could be hurting your financial health.
Leaving a Small Balance on Your Credit Card: Contrary to popular belief, leaving a small balance on your credit card does not help your credit score. In fact, the best way to build your credit scores is by paying off your balances in full each month.
Checking Your Credit Scores: Checking your credit scores does not cause them to go down. It's actually a good idea to regularly monitor your scores to ensure there are no errors on your credit reports or signs of identity theft.
Credit Checks Impacting Your Scores: Your credit scores can go down when a lender runs a 'credit check,' especially if it's a 'hard inquiry.' Be mindful of how often you apply for credit to minimize the impact on your scores.
Approval for Credit Cards with Bad Credit: Contrary to popular belief, people with bad credit can still be approved for credit cards. There are options available for those looking to rebuild their credit, such as secured credit cards.
Buy Now, Pay Later Services: Using buy now, pay later services is not likely to improve your credit scores. While these services may not impact your credit score, it's important to be aware of the fees and repayment terms associated with them.
By debunking these credit myths and gaining a better understanding of how credit works, you can take control of your financial health and work towards achieving your goals. For more information on the survey methodology, refer to the 2024 State of Consumer Credit Report by NerdWallet.